Swedish company H2 Green Steel and Scandinavian utility Fortum have signed a contract for the supply of green electricity for H2 Green Steel's steel plant in northern Sweden.
The partnership is expected to enable H2 Green Steel to source CO2-free electricity for its production of green steel in northern Sweden in both the short and long term. The parties intend to further develop the cooperation under long-term power purchase agreements (PPAs).
The framework agreement will initially comprise two contracts for 2.3 TWh per year: an index-based PPA for 1.3 TWh per year (from 2026) with a five-year hedging horizon, and a fixed-price PPA for 1 TWh for up to nine years (from 2027).
Up to 5 million tons of green steel per year?
The H2 Green Steel plant in Boden, Sweden, relies on an electrolyzer for hydrogen supply, with a capacity of 700-800 MW, according to the company. It supplies the hydrogen to reduce iron ore to sponge iron, but requires massive amounts of electricity to do so. H2 Green Steel therefore describes its partnership with Fortum as a "major step toward decarbonizing the steel industry."
The plant will initially produce an annual volume of 2.5 million tons of green steel. In the second phase, the company plans to ramp up production to around 5 million tons annually. The plant is scheduled to come on stream in 2025.
"Decarbonization of industrial processes is a fundamental next step towards carbon neutrality. H2 Green Steel is one of the companies paving the way for this green industrial transformation in the Nordic countries.
We believe that the complexity of large-scale electrification and hydrogen projects requires cross-sector partnerships as well as large amounts of clean energy," says Rikard Dagerbäck, Sales Manager & Strategic Customer Director, Fortum.